Thursday’s class made me think a lot about the effects
pricing has on customer perception and its importance to a company’s market
position. As is the case with Culinarian, competing as a company that offers
quality products, the negative effects related to price promotions may outweigh
any benefits. It is important for employees to not make false assumptions. For
instance, many assume that offering a price reduction will generate more
interest in their product, and increase their customer base. However, there are
factors that counter this argument. These include the indirect effects associated
with price promotions. When retailers offer premium products at discounts, consumers
may question the item’s quality, brand value, and effectiveness; this damaged
view of the product may deter them from making the purchase.
I do not think premium goods should offer price promotions
through their main distribution channels. The most effective way for consumers
who are unable to pay full price, but interested in purchasing these products,
is by making the purchase through discount stores/websites such as eBay or
amazon. These mediums can be very effective to increase product distribution of
premium products without affecting its perceived value.
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